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The law accounts for this. Jobs and industries that previously and traditionally don’t work on tips cannot convert to a method you describe.

I’m not sure if this is meaningfully different from offering a cash discount because you evade taxes on cash transactions.

And EMV fees.

Yes, this rarely seems to come up in discussions of restaurant tipping culture in the US but especially given that a lot of municipalities have additional hospitality or food and beverage taxes over and above sales tax, there’s a strong incentive to keep menu prices low by encouraging tipping, as a way to minimize the taxable portion of the bill.

If I need to make sure a server earns $200 after tax for a shift in order to be able to attract them to work for me, it is definitely to my advantage for as much of that money as possible to come directly from the customer as tips.